K Street shuffle

Arena and art-house schemes are out. What now?

There goes the neighborhood: As landowners and the city redevelopment agency jockey for position, some K Street merchants like Jimmy Flores are being squeezed out.

There goes the neighborhood: As landowners and the city redevelopment agency jockey for position, some K Street merchants like Jimmy Flores are being squeezed out.

Photo By Larry Dalton

During lunchtime at Serlof and Co. Fine Clothing, a fireman uses his break to drop by and pick up what proprietor Jimmy Flores proclaims is “the nicest suit on this street.”

A little girl waits patiently, jingling some coins with which to buy a lollipop. A woman, perhaps a worker from one of the office buildings nearby, also waits, contemplating a row of plump frankfurters that turn silently in the hot-dog machine near the shop’s front door.

It’s an eclectic shop. Racks of men’s suits dominate most of the store. Historic photos of K Street in the 1890s and 1920s, along with posters of James Dean, prints of Gustav Klimt paintings and dozens of other pieces of ephemera scattered here and there, give the shop more personality than the average department store. In 2002, Flores added the mini mart in the front part of the shop, just to help cover his business expenses.

“Before, I would have never considered it. But the fact is that the street is going to hell. I have to do what I can,” he says.

“So, now I can sell a $1,000 suit next to a hot dog. It doesn’t matter to me one lick.”

But, a few weeks ago, Flores painted his window to read “everything must go,” signaling the end of more than a decade of doing business on K Street. “It ripped my heart out to do it,” Flores explains, but despite what he sees as the steady deterioration of the neighborhood around Seventh and K streets, his rent has increased dramatically, doubling in the past three years. When his landlord asked for another $1,000 a month, Flores decided it was time to move on.

As to when he will finally close his doors, where he will go next and whether he’ll stay in the business of selling fine suits, or even hot dogs, Flores says, “I just don’t know. I’m kind of taking it day by day.”

So it is on K Street, not just for Flores but for other merchants, property owners and even local government officials trying to make some sense of the city’s troubled main street.

Despite decades of work, as well as hundreds of millions of dollars of private and public investment, K Street’s future appears as uncertain as ever.

A half-dozen shops have gone vacant in just the past few months. And controversial projects aimed at reinvigorating the street—a proposed sports arena at Seventh and K streets, and a Century Theatres “art house” project at 10th and K streets—have died for lack of political support.

In the midst of all this uncertainty, the city’s Downtown Development Group, along with the Sacramento Housing and Redevelopment Agency (SHRA), is trying to gain public support for raising even more redevelopment funds to pour into K Street and other run-down stretches of the central city.

When Flores does leave, it will be the latest in a recent exodus of small businesses from the 700 block of K Street.

The Yummy Choice restaurant left earlier this summer, along with Comics & Comix comic-book shop. Troy Agid, who owns Bonehead Tattoos at 718 K Street, also is looking for new digs, hoping to find better rent, or at least better foot traffic. All were tenants of developer Mo Mohanna, who owns more individual pieces of property than any other landowner downtown.

Mohanna makes no bones about the fact that the rent increases are part of an effort to “re-tenant” the buildings he owns. “We’re trying to clean up the image of K Street,” he explained. So, out go the tattoo shops and comic-book stores, the frankfurter and menswear emporiums. Instead, Mohanna said, he wants to bring in “national tenants,” but he declined to say what chain stores he has spoken to.

The shake-up comes on the heels of city officials publicly criticizing Mohanna for not doing enough to improve his K Street properties. Earlier this summer, Downtown Development Group Manager Wendy Saunders made comments in the local press suggesting that the city was considering using its power of eminent domain to acquire Mohanna’s property in the 700 block of K Street.

“Over my dead body,” Mohanna told SN&R. “If I have to spend $5 million, I will do it, to keep them from taking my property and giving it to someone else.”

Mohanna said that in addition to improvements of the buildings on the 700 block, he is planning a mixed-use housing and retail project at Eighth and K streets.

Saunders said that’s all good news, if Mohanna goes through with the projects.

“I certainly hope that the reason those people are gone is that he’s getting some longer-term tenants in there that will invest in the property,” she said.

Ironically, while city officials criticize property owners like Mohanna, one of the most “blighted” stretches on K Street is owned by the city of Sacramento’s redevelopment agency.

The south side of K Street between 10th and 11th streets is mostly owned by the city, which has struggled for years to find a suitable project for the block.

Earlier this spring, the Downtown Development Group proposed a Century Theatres CinéArts multiplex at 10th and K streets that would specialize in independent films. (See “Closing credits” by Cosmo Garvin, SN&R Cover, March 25.) Saunders confirmed that the public reaction to the proposal—including fears that the CinéArts complex would undermine the historic Crest and Tower theaters—was so overwhelmingly negative that the city has quietly, though still unofficially, decided to abandon the project.

Meanwhile, the city continues to collect property on that block. It is in the process of using eminent domain to acquire the building that housed Capitol Clothing Co. and Harvest Market. Those businesses have relocated to other parts of downtown now, and the building remains vacant, though the city at this point has no solid plans for what to do with the property.

Despite all of the uncertainty surrounding K Street now, the city is trying to raise more money for its ongoing efforts to revitalize the city core.

Under state law, the downtown redevelopment area expires in 2010, seemingly leaving lots of time to tackle the “preponderance of blight” that Saunders said exists downtown. The real problem, Saunders explained, “is that we’re out of money.” Only about $30 million remains in the redevelopment agency’s coffers, enough for a possible theater project at Seventh and K streets and “one or two other projects,” Saunders explained. By renewing the redevelopment area now, she said, the city can begin to issue more debt with which to finance new projects.

Some property owners, like Mohanna, are skeptical about the need to raise more redevelopment money, believing it’s time for the private sector to take over. He’s understandably touchy about the redevelopment agency’s powers of eminent domain, and he questions the vast sums of public money that have been spent already.

“We’ve spent $350 million down here already. Have we gotten our money’s worth? I’m not so sure,” Mohanna said.

Neighborhood groups, housing advocates and others also have complained that the city has been preoccupied with big, expensive projects while lacking a coherent redevelopment strategy downtown. (See “Extreme makeover” by Cosmo Garvin, SN&R Cover, July 15.)

Perhaps responding to that kind of criticism, Saunders said that as part of the process of renewing the redevelopment area, city officials will be asking city residents and business owners to help craft a vision for K Street and other parts of downtown. The agency hasn’t quite figured out what the process will be, but Saunders said it should begin as early as October. More details likely will be provided in a report to the city council due in mid-September. “The mayor really wants to have a community process on K Street,” Saunders explained. “We want to know what people would like to see happen there … what they like and what they don’t like.”

Flores considers the tableau outside his shop door. Even after the lunch rush, the street is still busy with shoppers and panhandlers, cops and children milling around, coming in to try on a jacket or buy a smoothie.

“You know, some of my best customers sleep under bridges,” the clothier says with a laugh. Later, the office workers will go home, and K Street will get more desolate. Especially in the evening, he says, is when the petty, and even the not-so-petty, crime happens.

“The thing is, you think you see a lot of hustling out there, people selling drugs or selling their bodies. But that’s not the real hustling,” he says.

The real hustling is people like him, small-business owners trying to make a buck on K Street. Or it’s people like Mohanna, hoping that their property on K Street is finally close to paying off.

Flores says he doesn’t blame Mohanna for raising rents. “He bought this stuff up 25 years ago. He’s been paying his taxes. He deserves his payday,” Flores muses. What gets him, he says, is that the city doesn’t seem to know what it’s doing. He was frustrated when the arena deal for K Street, which he supported, fell apart.

“We look stupid. To the rest of the country, we have egg on our face,” he says.

At the same time, he says, he resents the way City Hall throws its weight around, such as when it raised the possibility of eminent domain with Mohanna’s property.

“They don’t respect the merchants and the property owners. Everybody in the positions of authority, they don’t know people on the street; they don’t understand the street,” he says.

“They just steam-roll everybody.”